Well here we are at the end of August – not exactly sure how that happened quite so fast, but time marches on. Tiana and I were down in Nashville last week (thanks to the Trucking Associations Insurance Council) showing how the CAB services can be used to underwrite and risk control in worker’s compensation. We stopped in to see the folks at Greenwich Transportation Underwriters. I had to post a copy of the mural on the wall in the office I wish you see it up close and really get the many little industries references. It was a riot!
This was a view from the driver side of a big rig heading into Nashville. I love it. Thanks for letting me share this with the industry. I love the pink boots!
By the way the Bits will now include worker’s compensation information which may be relevant to those groups evaluating truck workers compensation – a tough task to say the least. Help us get the word out and pass this report along to anyone interested. We would be happy to discuss the relevance of the data to that segment of the insurance industry!
Now on to the news:
COMMERCIAL DRIVERS LICENSES – The FMCSA has issued regulatory guidance, announcing that state driver licensing agencies may agree to administer the commercial driver’s license test to individuals from another state and may facilitate the commercial learner’s permit application for residents of another state. To do so, the state driver licensing agency administering the general knowledge test must transmit the tests directly, securely and electronically to the applicant’s state of domicile. The state of domicile would also need to agree to accept the test results and issue the commercial learner’s permit.
CVSA INSPECTIONS – The CVSA announced that it has added an inspection for electronic equipment in commercial vehicles. The Level III inspection is conducted wirelessly while the vehicle is in operation. Level VIII inspections must include the following:
- a descriptive location, including GPS coordinates;
- electronic validation of who is operating the vehicle;
- appropriate driver’s license class and endorsement(s) for vehicle being operated;
- license status;
- valid medical examiner’s certificate and Skill Performance Evaluation (SPE) Certificate;
- current driver’s record of duty status;
- hours-of-service compliance;
- USDOT or (Canada) NSC number;
- power unit registration;
- operating authority;
- Unified Carrier Registration (UCR) compliance; and
- Federal out-of-service orders.
The question will be whether the states will develop the resources needed to implement the inspections.
CARGO THEFTS – The SensiGuard Supply Chain Intelligence Center, formerly known as FreightWatch released its latest cargo theft report. Incidents of cargo theft were down, but the average loss value of stolen merchandise spiked significantly compared to the first quarter of 2017. From April to June, companies recorded 126 incidents of cargo theft in the U.S., down from 140 for the previous quarter, with an average loss value per incident of $140,162, up from $124,933 in the previous quarter, according to a report issued Tuesday. Those numbers represent a 10 percent decrease in volume and 12 percent increase in value compared to the first quarter of 2017. The numbers also represent a 28 percent dip in thefts and a 13 percent decline in loss values compared to April-June 2016. The number of thefts valued at over $1 million during the quarter was four, compared to one such theft in the first quarter of 2017 and three such thefts during the same period in 2016.
What are the big hit items? Food and beverages, home and garden and electronics loads Where are the thefts? California, Texas, Tennessee and Georgia. Theft of full truckloads remains the most prevalent method of cargo theft, accounting for 74 percent of all reported thefts.
Of note was a report which focused on the trend in cargo theft of miscellaneous product data recorded from July 2015 to June 2017. The number of theft incidents involving miscellaneous cargo, which typically consists of mixed load retail freight bound for big box retail stores or similar distribution centers, has nearly doubled during the past two years, accounting for 11 percent of reported incidents.
SLEEP APNEA – The FMCSA, in moving to remove regulations as mandated by the President has withdrawn the sleep apnea proposal. The FMCSA concluded that it believes “current safety programs” are the appropriate avenues to address the issue. Without a formal regulation regarding sleep apnea, the FMCSA has relied on guidance. In an FMCSA bulletin from January 2015, the agency said it “does not require that these drivers be considered unfit to continue their driving careers, only that the medical examiner make a determination whether they need to be evaluated and, if warranted, demonstrate they are managing their obstructive sleep apnea to reduce the risk of drowsy driving.”
CVSA ROADCHECK – CVSA conducted inspections in Canada and the US in June, completing more than 62,000 inspections. Inspections revealed numerous problems with brake systems, cargo securement and tires dominating the list of out-of-service violations handed out by law enforcement According to CVSA, 23 percent of vehicles and 4.2 percent of drivers that received Level I Inspections were placed out of service.
The top three out-of-service vehicle violations were for brake systems (26.9 percent of vehicle had out-of-service violations), cargo securement (15.7 percent) and tires/wheels (15.1 percent).
According to CVSA, a total of 62,013 Level I, II and III inspections were conducted during the 2017 International Roadcheck in the U.S. and Canada. Of those inspections, 19.4 percent of commercial motor vehicles were placed out of service, and 4.7 percent of all drivers inspected were placed out of service.
There were 40,944 Level I inspections; 12,787 Level II walk-around inspections, and 8,282 Level III driver-only inspections conducted during the campaign. Of the 62,013 total Level I, II, and III inspections conducted, 2,940 drivers (4.7 percent) were placed out of service for driver-related violations.
During Roadcheck 2017, there were 7,713 inspections conducted in Canada and 54,300 conducted in the United States.
Vehicle-related results are as follows:
- Of the 40,944 Level I Inspections conducted, 9,398 vehicles (23 percent) were placed out of service for vehicle-related violations.
- Of the 2,267 vehicles carrying hazardous materials/dangerous goods that received a Level I inspection, 12.8 percent were placed out of service for vehicle-related violations.
- The top three vehicle violations related to the transportation of hazardous materials/dangerous goods were for loading and securement (40.4 percent of all out-of-service hazardous materials/dangerous goods violations), shipping papers (22.7 percent) and placarding (20.8 percent).
- 398 motor coaches received Level I inspections; 40 (10.1 percent) were placed out of service for vehicle-related violations.
- Of the vehicles placed out of service, brake adjustment and brake system violations combined to represent 7,743 (41.4 percent) of all out-of-service vehicle violations.
Driver results are as follows:
- Of Level I, II and III inspections of vehicles carrying hazardous materials/dangerous goods, 1.9 percent were placed out of service for driver-related violations.
- Out of the 598 motor coaches that received Level I, II or III inspections, 23 drivers (3.8 percent) were placed out of service for driver-related violations.
- The top three driver-related violations were for hours of service (32.3 percent of driver out-of-service violations), wrong class license (14.9 percent) and false log book (11.3 percent).
- There were 710 safety belt violations.
Each year, International Roadcheck places special emphasis on a category of violations. This year’s focus was cargo securement. While checking for compliance with safe cargo securement regulations is always part of roadside inspections, CVSA highlighted proper cargo securement this year as a reminder of its importance. Cargo securement violations (not including hazardous materials/dangerous goods loading/securement) represented 15.7 percent of all vehicle out of service violations during this year’s Roadcheck.
The top five violations related to cargo securement (out of a total of 3,282) in the United States were:
- No or improper load securement (423)
- Failure to secure vehicle equipment (379)
- Leaking, spilling, blowing, falling cargo (281)
- Insufficient tiedowns to prevent forward movement for load not blocked by headerboard, bulkhead or cargo (256)
- Failure to secure load (178)International Roadcheck is the largest targeted enforcement program on commercial motor vehicles in the world, with more than 13 trucks or buses inspected, on average, every minute throughout North America during a 72-hour period.
ROAD FATALITIES – National Safety Council released its reports indicating a decrease in roadway fatalities in the first half of the year. The report indicates that there were 18,680 fatalities, 2.1 million seriously injured people, and 191 billion in costs associated with the deaths and injuries. The NSC cautioned that this decrease is not that significant since the preceding numbers were exceedingly high and they expect an increase in the remainder of the year.
CSA – The FMCSA has revised the CSA methodology to include 12 new roadside inspection violations. The list of new inspections is below.
|Operating a property-carrying commercial motor vehicle while all other occupants are not properly restrained.
|Tire-front tread depth less than 2/32 of inch on a major tread groove
|Tire-other tread depth less than 1/32 of inch measured in 2 adjacent major tread grooves
|Operating a CMV at speeds exceeding the speed-restriction label of the tire.
|Weight carried exceeds tire load limit
|Operating a CMV while weight carried exceeds tire rating due to under-inflation
|Driver on duty and in possession of a narcotic drug / amphetamine
|Driver on duty and under the influence of, or using a narcotic drug / amphetamine, which renders the driver incapable of safe operation
|Driver having any measured alcohol concentration, or any detected presence of alcohol while on duty, or operating, or in physical control of a CMV
|Driver having possession of alcohol while on duty, or operating, or in physical control of a CMV
|Operating a CMV while under the influence of an intoxicating beverage regardless of its alcohol content
|Hazardous Materials Compliance
|Represent a package as meeting a specification that does not meet a specification
These new violations were applied retroactively in the SMS with the July 28, 2017 snapshot.
YOUNG DRIVER ASSESSMENT TOOL – ATRI released phase one of its research trying to determine the feasibility of a Young Driver Assessment Tool. The tool would be used to identify younger drivers who match characteristics of safe older drivers. Individual traits that can reliably predict driver safety outcomes – personality, health, and cognition – are identified and discussed in this latest ATRI report. The next phase of ATRI’s research will involve assembling the relevant measures of the identified predictive factors and conducting a beta test of the Assessment Tool on a small sample of both veteran and entry-level drivers. Results of the beta test will determine if a larger scale study is warranted. The technical memo is available, free of charge, on the ATRI website.
The Northern District in California rejected a household claimant’s request that the Court dismiss a declaratory judgment action filed by a motor carrier seeking to enforce a limitation of liability. The Court held that the motor carrier presented a reasonable basis for asserting that the transportation contract with an intermediary was binding on the shipper and might limit the motor carrier’s liability. (United Van Lines v. Deming, 2017 WL 3149301)
And the preemption battle continues. The Eastern District of Ohio granted judgment to a motor carrier dismissing all state law claims asserted for damage to an interstate shipment. Counts of negligence and conversion could not be pled in the alternative. (Steese v. SML Relocation, 2017 WL 3494330)
Over in the Central District of California the Court held that it would retain a case involving an interstate shipment, allowing the defendant to point to bills of lading which showed that the shipments were interstate and therefore subject to the Carmack Amendment even if not specifically pled. (Shaghal, Ltd. V. Central Transport, LLC, 2017 WL 3317812)
The Southern District of California held the claims against a motor carrier were subject to the preemptive effect of the Carmack Amendment even when there was allegation that part of the shipment went by air. The Court concluded that the claim was interstate in nature even if only partially on a truck. (Sony Biotechnology v. Chipman Logistics, 2017 US Dist LEXIS 134440)
The District Court in Maryland also considered preemption issues, concluding that ICCTA barred any state law claim, other than the breach of contract claim for overcharge. (Monga v A.B.S. Moving & Storage, 2017 WL3228139)
Federal Express lost its effort to apply a limitation on liability contained in its rules tariff despite the fact that the shipper prepared a bill of lading which incorporated lawful tariffs. The Eastern District of Texas held that the absence of any notation on the bill of lading which referenced the limitation or any other classification was fatal to establishing notice of the limitation on a first shipment. (Natural Polymer International Corp. v. FEDEX Corp., 2017 U.S. Dist LEXIS 131023)
Here is another decision in a case that we have reported on a number of times over the last few years. This time the Southern District Ohio held that the burden of proving that something other than invoice price at destination was a proper measure of damages rested with the motor carrier. In this case the Court held that replacement cost and not selling price was the proper measure of damages as the motor carrier established that the shipment was replaced. The motor carrier was not required to disprove lost volume theory espoused by many plaintiffs. Cargo adjusters should read this decision for arguments and ways to support this conclusion when adjusting losses. (Exel, Inc. v Southern Refrigerated Transport, 2017 U.S. Dist LEXIS 133731)
Worker’s compensation is not life insurance says the 6th Circuit. When a driver died following an embolism his estate was not entitled to benefits under the Occupational Accident policy as it was not a covered injury. (Estate of Filer v. National Union Fire ins Co., 2017 US App LEXIS 16307)
A worker’s compensation insurer can intervene, as a right, into a tort action brought by the truck driver employee who recovered benefits. The Middle District of Louisiana held this to be a right as Louisiana law held that an insurer who failed to intervene would be barred from claiming reimbursement. (Joiner v. Loutzenhiser. 2017 WL 3448846)
Can states inspect motor carriers when there is no suspicion that the motor carrier is operating improperly? The 8th Circuit held that a Missouri statute authorizing suspicionless stops of commercial vehicles was not unconstitutional. The Court did, however, allow the action to proceed to determine whether the state could impose this requirement on farm vehicles which may not be subject to commercial truck regulation. (Calzone v. Hawley, 2017 WL 3485738)
The Middle District in Pennsylvania held that the estate of a truck driver was not permitted to seek recovery from the client of his employer’s under the shipping contract. It was interesting to read the facts and analysis when the defendant provided information, which was passed on to the driver, with various routes for transport to their drill sites. The Court held that the defendant had no absolute duty of care to ensure that the driver, who missed a turn and unfortunately lost his life, was fully protected while attempting delivery. (Garlick v. Anadarko Petroleum Corp., 2017 WL 3485738)
A plaintiff’s effort to have a case remanded to state court by adding the trucking company’s dispatcher, who lived locally, failed. The Southern District of Texas held that the dispatcher was joined only to defeat diversity and dismissed the dispatcher and retained jurisdiction. (Harrison v. Darnas, 2017 U.S. Dist. Lexis 128975)
A trucking company’s effort to keep a case in federal court when then the plaintiff alleged in the complaint that she sought damages in excess of the jurisdictional minimum for diversity jurisdiction was unsuccessful, The plaintiff sought remand claiming that she understood that she was unlikely to get $75,000 or more. The Western District of Arkansas agreed and remanded the case. (Skinner v Empire Express, 2017 WL 3228124)
A commercial auto insurer was permitted to proceed with its declaratory judgment action seeking a declaration that a driver was not entitled to coverage for injuries caused during an altercation with a third party. The District of Alaska held that determining whether the altercation arose out of the use of the auto would not impact the underlying tort action. (United Financial Casualty Company v. Northern Gravel & Trucking, LLC, 2017 U.S. Dist. LEXIS 133720)
The Court of Appeals in California upheld a $3.3 million verdict against a trucking company concluding that the presence of THC in the plaintiff’s blood was not evidence that the plaintiff was driving under the influence concluding that the cause of the accident was the negligence of the truck driver. (David v. Hernandez, 2017 WL 3141173)
Anything you say can and will be used against you – It is true. Plaintiff’s counsel who represented the plaintiff in two separate accidents saw his communications on the second accident come back to bite the plaintiff in the first action. The Eastern District of Louisiana held that the statements of counsel could be used in the suit against a trucker to establish that plaintiff’s injuries in fact occurred during the second accident. (Wright v. National Interstate Ins. Co., 2017 US DIST LEXIS 136793)
Over in Kansas the District Court held that the estate of a cattle driver was not permitted to recover from the consignee when the driver was hurt while assisting in moving other cattle in the receiving line. The Court held that the danger was open and obvious and undertaken by the decedent without direction of the consignee. (Gregory v. Creekstone Farms Premium Beef, 2017 WL 3168825)
A plaintiff was not permitted to assert a punitive damages claim against a motor carrier simply because it employed a driver who had minor collisions and citations. The Eastern District of Arkansas also held that a claim of negligent entrustment could not be asserted when the motor carrier accepted vicarious liability for the actions of the driver. (Bizzell v. Transport Corporation of America, 2017 WL 3381358)
The Middle District of Florida afforded judgment to an insurer, concluding that a policy would drop down to the minimum financial requirement of $300,000 when the driver was not reported prior to the loss. (National Independent Truckers Insurance Co. v. Wilner Mathieu, 2017 US Dist Lexis 119903)
Have a safe and pleasant Labor Day. See you in September.